drug prices

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In January, GlaxoSmithKline, a global pharmaceutical manufacturer, announced that it would stop delivering its prescription drugs to wholesalers that supply Canadian mail order pharmacies that sell to American patients. These pharmacies, clustered in Manitoba, take advantage of the price difference between the two countries. Recently, AstraZeneca, an Anglo-Swedish pharmaceutical manufacturer, indicated that it would take similar action. Glaxo has weathered a storm of accusations that it is preventing American patients from getting the company’s medicines at affordable prices.


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The newspapers and airwaves are filled with people fuming about Fair Pharmacare. There are three major complaints (other than the challenge of getting through to Pharmacare to register). Firstly, that Fair Pharmacare forces patients to pay more of their own money for prescriptions. Secondly, that the requirement to report your income is a violation of privacy. Thirdly, that it is inappropriate to use income from 2001 to determine benefits in 2003.

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Faced with a crowd of 2,000 seniors protesting in front of the provincial legislature last Tuesday, the provincial government reneged on its commitment to a means test for Pharmacare benefits. This is a bad sign. Seniors currently pay a maximum 75 cents a day ($275 per year) for prescription drugs that are listed by Pharmacare, and taxpayers pick up the rest. If the government is afraid to take the baby step of means testing for Pharmacare, it is unlikely to make more significant reforms that are necessary to improve health care in British Columbia.

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In his opinion about reforming Pharmacare on October 3, Victor Vrsnik, of the usually sensible Canadian Taxpayers Federation, resurrected the fantasy of a national pharmacare plan. He supposes that the purchasing power of the federal government would somehow lead to lower prices. This is a surprising statement from the CTF, which has done great work exposing how incompetent the government is at purchasing other goods.

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The Congress and state governments in the U.S. currently are considering proposals to import prescription drugs from Canada and to use government`s so-called bargaining clout to wring discounts from drug makers. Unfortunately, both initiatives are fraught with self-delusion.


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That report’s introduction reveals the futility of the task: “… a one-person, time-limited Commission cannot address every conceivable issue affecting the future of health care in Canada.” Take one man, add a budget of over $15 million, solicit the views of every interest group in the land for ten months, and the best you’re going to get is a vague statement of indecision.